The Union Cabinet had approved proposals to set up three semiconductor plants at a cumulative investment of Rs 1.26 lakh crore.

Key Highlights

  • Set up by: Tata Electronics Pvt. Ltd. in partnership with Taiwan’s Power Chip Semiconductor Manufacturing Corp.
  • Set up at: Dholera (Gujrat)

• Plant Capacity: The plant will have a capacity for 15 million chips per day.

  • These chips will find applications in various industries, including high-performance computing, electric vehicles, defence, and consumer electronics.

Semiconductor fabrication plant

  • It is a manufacturing plant in which raw silicon wafers are turned into integrated circuits (ICs). 
  • A semiconductor fabrication plant, which is also known as a foundry, is a factory where devices such as integrated circuits are manufactured. These are found in the microelectronics industry. 
  • A foundry does not produce its own designs but rather produce designs of fabless semiconductor companies.
  • The core of a semiconductor fabrication plant is the clean room, essential for controlling the environment and eliminating dust.  The clean room must combat vibration and maintain strict control over temperature and humidity to minimize static electricity, ensuring the precision and reliability of semiconductor manufacturing processes.


  • It will build India’s first AI-enabled state-of-the-art fab.
  • It will also address the growing demand in markets such as computing and data storage, automotive, wireless communication, and artificial intelligence.
  • This is a crucial step for India towards creating an indigenous semiconductor ecosystem in India.
  • It may reduce India’s dependency on other countries as the global semiconductor chip industry is dominated by some countries (Taiwan and South Korea make up about 80% of the global foundry base for chips).
  • Challenges A report states that nearly “10 gallons” of water are required to make a single computer chip.
  • Manufacturing process is highly complex and involve a wide range of specialized equipment and materials.
  • India also currently lacks original research in semiconductor design and a talent pool.
  • India faces competition from countries like the US and EU with more attractive incentives for chip manufacturers.
  • India is currently focusing on older chip technology compared to cutting-edge nodes used in advanced devices.
  • India lacks enough skilled workers specifically trained for chip fabrication facilities.

Way forward

  • The government of India needs to fill in domestic gaps in establishing a semiconductor
  • Ecosystem in order to bring in technology suppliers and investors. 
  • India needs to place a high priority on strengthening the capabilities of chip design. 

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